Rules Based Investment Discipline
A quantitative approach to asset allocation
What happens if you retire here?
Markets are volatile. They fluctuate. They go up, down, and sideways. Long-term investing can help mitigate some of this inherent risk. But what if you don't have that luxury? What if the milestones in your life don't neatly align to market cycles?
Traditional investment wisdom suggests allocating amongst asset classes is your best bet to avoid market drawdowns, since different investments will perform better than others each year. The same asset classes rarely stay on top very long. The below chart shows how the performance of these different investments compared to each other each year. While our process is based in traditional asset allocation, it begs the question:
In difficult market environments, wouldn't it make more sense to not be invested in some or all of these asset classes?
Hover over the chart to understand why.
As of December 2022, Source: Portfolio Visualizer
This is the essence of what Reveille's Rules Based Investment DisciplineTM (RBID) seeks to solve. By identifying and acting on prevailing market trends, our goal is to participate only when market conditions are favorable.
To learn more about RBID, click the below link to launch a short video, or please contact us.
Investing involves risk and you may incur a profit or loss regardless of the strategy selected. Past performance is not indicative of future results. Representation of RBID process using the Dow Jones Industrial Average (DJIA) - 2017-2022. The Down Jones Industrial Average (DJIA), commonly known as “The Dow”, is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. You cannot invest directly in any index .
Our discipline seeks to identify inflection points in market trends and produces buy or sell signals as new trends emerge and moving averages cross. Notice how we never attempt to buy a market cycle low, nor sell a market cycle high. The key is to participate in broader market trends and apply this discipline to each asset class in the strategy.